Sam, the owner of a small company, learned that a competitor was planning to spend $150,000 on promotion in the next financial year. As soon as he learned this, Sam called his finance manager and said, "I want to spend $150,000 on promotion next year." In this case, which method of promotional budgeting is used by Sam?

Question

Quizplus · Accepted Answer

Sam is using the competitive-parity method of promotional budgeting, where he sets promotional spending at the same level as his competitor. He did not use the objective-and-task method as he did not identify specific objectives and tasks to allocate the budget. The percentage-of-sales method and the bottom-up method were not mentioned in the scenario. The pull-push method is not related to the promotional budgeting method.

Sam, the Owner of a Small Company, Learned That a Competitor